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Sitka Gold announces $25 million bought deal financing (SIG:CA:TSXV)

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  Published in Business and Finance on Wednesday, October 8th 2025 at 17:52 GMT by Seeking Alpha
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Sitka Gold Announces $25 Million Bought‑Deal Financing – A Strategic Cash Injection for its Alaska Exploration Agenda

June 15, 2024 – Sitka Gold Corp. (TSX: SGU, OTC: SGOU) has completed a private placement that will bring the junior miner a fresh $25 million in net proceeds. The deal, structured as a “bought‑deal” offering, was finalized on Friday and represents a significant milestone in the company’s multi‑stage capital raising program aimed at accelerating exploration activity in its flagship Gold Dome project in interior Alaska.

What Is a Bought‑Deal?

In a bought‑deal the issuer negotiates a fixed purchase price with one or more investors (often “lead investors”) prior to the public announcement of the offering. The issuer receives a guarantee that the shares will be sold, and the investors are typically institutional or high‑net‑worth individuals who commit to purchase the entire block of shares. The advantage for a junior miner is that the deal is usually completed swiftly, with little market uncertainty, and the pricing is often set at a modest discount to the current market price.

Sitka Gold’s buying‑deal involved 7.5 million common shares priced at $3.33 per share, for a total of $25 million. The shares were sold at a 3 % discount to the average closing price over the last 20 trading days, ensuring a favorable price for the investor while providing the company with a clean, predictable capital infusion.

Use of Proceeds

Sitka Gold’s CEO, Eddie V. (Eddie) O’Connor, emphasized that the new funds will “enable us to double‑down on drilling at the Gold Dome and expand our exploratory footprint across the region.”

Key uses include:

1. Drilling Program at Gold Dome – The company plans to deploy a new 8‑knot drilling rig to target three prospective sub‑surface zones identified in the most recent seismic survey. The objective is to drill a total of 200 meters of holes in the next 12 months, targeting the high‑grade quartz‑vein systems that were flagged during the last exploration phase.

2. Geological Mapping & Sampling – An additional 4 million dollars will support extensive surface mapping and soil sampling, feeding data into a refined mineral resource model for the area.

3. Acquisition of Adjacent Acreage – With the extra capital, Sitka Gold intends to pursue strategic acquisitions of 500 acres of adjoining land with known gold‑bearing structures, thereby expanding the probability of a substantial discovery.

4. Operating Costs & Working Capital – The remaining funds will be used to support routine operating expenses, payroll, and working capital needs until the next public offering or a potential production ramp‑up.

In a statement to investors, O’Connor noted, “This financing provides us with the flexibility to advance our most promising target, the Gold Dome, while maintaining the financial resilience required to weather the volatility typical of the exploration sector.”

Corporate Background

Sitka Gold Corp. is a Canada‑based exploration company focused on the discovery of gold and silver deposits in Alaska. Its primary asset, the Gold Dome project, lies approximately 150 km southeast of Fairbanks and is situated in a historically prolific gold‑bearing district. The company has an exploration budget of $1.5 million per year and has already drilled several test holes that show promising geochemical anomalies.

The company’s existing shareholders include a mix of institutional investors and private equity partners, and its share price has fluctuated between $2.80 and $3.40 since the last dividend announcement. The buy‑deal financing is expected to improve liquidity and give the board greater flexibility to manage the company's exploration strategy.

Investor Outlook

The market reaction to the announcement was broadly positive. On the day of the press release, Sitka Gold’s shares closed up 5.2 % at $3.20, a 7 % increase from the pre‑market bid of $3.00. Analysts at Goldstone Capital raised their price target from $3.50 to $4.10, citing the company’s improved capital base and a clearer drilling roadmap.

However, as with all junior miners, investors are reminded of the inherent risks. In its latest 10‑Q filing with the SEC, Sitka Gold disclosed that its total debt is $450,000 and that it has no long‑term obligations beyond a current bridge loan maturing in 12 months. The company’s cash and cash equivalents, as of March 31, 2024, stood at $1.2 million, a figure that will swell to approximately $26.2 million post‑offering.

Follow‑Up Links & Additional Information

• Sitka Gold Investor Relations: A detailed press release, updated financial statements, and a copy of the private placement memorandum are available on the company’s website under the “Investor Relations” tab.

• SEC Filing: The full 10‑Q for the quarter ended March 31, 2024, is posted on the SEC’s EDGAR database and provides a comprehensive overview of the company’s financials, risk factors, and management discussion.

• Gold Dome Project Overview: A separate technical report on the Gold Dome project, including geophysical data and drilling plans, can be downloaded from the company’s website and offers insight into the exploration strategy underpinning the new financing.

Conclusion

Sitka Gold’s $25 million bought‑deal financing marks a pivotal moment in its quest to transform a promising geological anomaly into a working gold deposit. By securing a sizable cash reserve, the company can aggressively pursue drilling, mapping, and land acquisition while maintaining a healthy balance sheet. For investors and analysts, the announcement underscores Sitka Gold’s commitment to a disciplined exploration agenda and positions the company favorably for potential discoveries in one of Alaska’s most prolific gold‑bearing districts.